Overall growth in the UK television market has been driven by an increase in pay TV subscriptions, counterbalancing a decline in advertising revenue, a market report has indicated.
The report, released by UK communications regulatory authority, Ofcom, demonstrated a total industry growth figure of only 1.3% in 2008, down from 7.4% in 2007, despite a rise of almost $350 million in pay TV subscription revenue.
Total television advertising spend in 2008 was pegged at $150 million.
“Subscription revenue raised by pay TV operators continued to be the engine of growth in 2008, with income rising by 6%,” the report stated.
“This was driven both by new subscribers and by higher per-subscriber revenue prompted by new value-added services.
“A reduction in television advertising revenue driven by the deteriorating economic environment offset these increases.”
The 1.3% rise in total television industry revenue was not enough to prevent job losses at many UK broadcasters earlier this year, with ITV, Channel 4 and Five all cutting staff numbers, according to the report.
The Middle East television market provides a stark contract to that of the UK, with television advertising revenue rising by 44% in the first half of 2009 compared to the same period in 2008, according to a document released by the Pan Arab Research Centre.
Two of the region’s largest pay TV operators, Showtime Arabia and Orbit recently announced merger plans, leaving ART as the only major competing pay TV operator in the region.